“¢ Subdued USD price action/NAFTA uncertainties do little to provide any meaningful impetus.
“¢ A modest uptick in oil prices underpin Loonie and exert some downward pressure.
The USD/CAD pair extended its consolidative price action through the early European session on Thursday and remained confined in a narrow trading range, just below the 1.3200 handle.
Yesterday’s BoC monetary policy update turned out to be a non-event for the major, with a combination of factors holding investors back from placing any aggressive bets and leading to a range-bound price action on Thursday.
The US Dollar lacked any firm directional bias and was seen consolidating in a range around the key 95.00 psychological mark. Investors also seemed to wait for any fresh update over the progress in talks to revise the North American Free Trade Agreement (NAFTA) before positioning for the next leg of directional move.
Meanwhile, a mildly positive tone around crude oil prices extended some support to the commodity-linked currency – Loonie and turned out to be the only factor behind a modest downtick, back closer to overnight swing lows.
Traders now look forward to the US economic docket, highlighting the release of ADP report and ISM non-manufacturing PMI, in order to grab some short-term opportunities. The key focus, however, would remain on Friday’s keenly watched employment details, both from the US and Canada.
Technical levels to watch
The 1.3155-50 zone might continue to act as an immediate support, which if broken is likely to accelerate the fall back towards 50-day SMA support, currently near the 1.3100-1.3095 region. On the flip side, bulls will be eyeing for a sustained move beyond the 1.3200 handle, above which the pair is likely to aim towards testing the 1.3265-70 supply zone ahead of the 1.3300 round figure mark.
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